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NH gov calls for 30-35 layoffs, higher tobacco tax (Boston.com)
04/08/2010
CONCORD, N.H.—Gov. John Lynch on Thursday proposed laying off 30 to 35 state workers and raising the tobacco tax by 20 cents to help close a projected $220 million budget shortfall by June 2011.
Lynch's plan includes $85 million in general fund spending cuts, compared to the $47 million proposed by House budget writers. Under the proposal, most agencies would face 2 percent reductions for the rest of the current fiscal year and 8 percent next year.
"These cuts will not be painless, and services to some citizens will in fact be impacted," Lynch said. "But I believe this is a balanced approach for what is admittedly a very difficult problem."
Aid to schools and municipalities -- the largest single part of the state budget -- would be cut about 1 percent under Lynch's plan. The state's share of retirement contributions for public workers would be cut to 20 percent.
The proposed cigarette tax increase would bring the state's tax to $1.98 per pack but keep it lower than neighboring states. The plan also calls for restructuring some state debt by taking advantage of low interest rates.
Lynch said he remains opposed to allowing slot machines and casino-style gaming as proposed in a bill the Senate has passed and the House is considering. Instead, Lynch's plan instructs the state Lottery Commission to look into offering fantasy sports league betting.
Lawmakers will consider Lynch's plan at hearings Monday and Thursday.
Last year, the state laid off about 200 workers after the employees' union rejected an alternative furlough plan. Lynch did not specify where the new layoffs would occur, though Health and Human Services Commissioner Nick Toumpas said a fair amount would come from his agency.
The proposed changes at Health and Human Services include having the state psychiatric hospital absorb what is now a separate center for troubled children, adding transitional housing and shelter beds to the juvenile detention center to save on outside contracts and cutting some funding for nursing homes, home health, and child and family services agencies.
Those cuts come at a time when demand for such services is growing. The agency serves about 150,000 people, or more than 10 percent of the state population.
"I think people have to understand just how vital these things are to a community, to a family and to the state," said Toumpas. "What I want people to understand is the interconnectedness of this. I can cut something, but that doesn't necessarily reduce the spending. It's just going to manifest itself somewhere else."
The $220 million shortfall includes about $19 million from the repeal of taxes on small businesses and on campsites and $45 million the state had counted on from a surplus in a fund that underwrites malpractice insurance. Courts rejected the state's claim to that money.
Lynch, a Democrat, said having to count those expected revenues as losses did not reflect mistakes made by his administration.
"We are facing the same economic challenges that over 40 other states are facing in terms of revenue shortfalls," he said. "If you look at their expected revenue shortfalls, ours dwarf in comparison. So if anything, it's a testament to good fiscal management here in state government."
But Senate Minority Leader Peter Bragdon said Lynch showed poor fiscal management in not controlling spending earlier.
"If those cuts had been made a year ago like we suggested, I think some of the social services reductions would've been significantly mitigated," said Bragdon, R-Milford, who also criticized Lynch's plan to have the University System of New Hampshire return $25 million to the state in exchange for adding $25 million to the capital budget for campus maintenance.
Lynch's plan includes $85 million in general fund spending cuts, compared to the $47 million proposed by House budget writers. Under the proposal, most agencies would face 2 percent reductions for the rest of the current fiscal year and 8 percent next year.
"These cuts will not be painless, and services to some citizens will in fact be impacted," Lynch said. "But I believe this is a balanced approach for what is admittedly a very difficult problem."
Aid to schools and municipalities -- the largest single part of the state budget -- would be cut about 1 percent under Lynch's plan. The state's share of retirement contributions for public workers would be cut to 20 percent.
The proposed cigarette tax increase would bring the state's tax to $1.98 per pack but keep it lower than neighboring states. The plan also calls for restructuring some state debt by taking advantage of low interest rates.
Lynch said he remains opposed to allowing slot machines and casino-style gaming as proposed in a bill the Senate has passed and the House is considering. Instead, Lynch's plan instructs the state Lottery Commission to look into offering fantasy sports league betting.
Lawmakers will consider Lynch's plan at hearings Monday and Thursday.
Last year, the state laid off about 200 workers after the employees' union rejected an alternative furlough plan. Lynch did not specify where the new layoffs would occur, though Health and Human Services Commissioner Nick Toumpas said a fair amount would come from his agency.
The proposed changes at Health and Human Services include having the state psychiatric hospital absorb what is now a separate center for troubled children, adding transitional housing and shelter beds to the juvenile detention center to save on outside contracts and cutting some funding for nursing homes, home health, and child and family services agencies.
Those cuts come at a time when demand for such services is growing. The agency serves about 150,000 people, or more than 10 percent of the state population.
"I think people have to understand just how vital these things are to a community, to a family and to the state," said Toumpas. "What I want people to understand is the interconnectedness of this. I can cut something, but that doesn't necessarily reduce the spending. It's just going to manifest itself somewhere else."
The $220 million shortfall includes about $19 million from the repeal of taxes on small businesses and on campsites and $45 million the state had counted on from a surplus in a fund that underwrites malpractice insurance. Courts rejected the state's claim to that money.
Lynch, a Democrat, said having to count those expected revenues as losses did not reflect mistakes made by his administration.
"We are facing the same economic challenges that over 40 other states are facing in terms of revenue shortfalls," he said. "If you look at their expected revenue shortfalls, ours dwarf in comparison. So if anything, it's a testament to good fiscal management here in state government."
But Senate Minority Leader Peter Bragdon said Lynch showed poor fiscal management in not controlling spending earlier.
"If those cuts had been made a year ago like we suggested, I think some of the social services reductions would've been significantly mitigated," said Bragdon, R-Milford, who also criticized Lynch's plan to have the University System of New Hampshire return $25 million to the state in exchange for adding $25 million to the capital budget for campus maintenance.
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